Are you looking for ways to grow your hard-earned TFSA (Tax-Free Savings Account) savings and earn monthly passive income at the same time? If so, you might want to consider adding some of the best dividend stocks on the market to your TFSA in 2024. Dividend stocks can help you create a reliable source of monthly income and grow your capital over time.
However, not all monthly dividend stocks have strong fundamentals. On the one hand, some might offer high yields but have low growth potential or unstable payouts. On the other hand, some might have consistent dividends but low returns or relatively higher risks.
To help you find the ideal balance between safety, yield, and financial growth, in this article, I’ll highlight two of the best Canadian monthly dividend stocks you can buy in 2024. You can boost your chances of earning excellent returns on investments in the long run by putting these kinds of monthly dividend stocks in your TFSA today.
Exchange Income stock
One of the best monthly dividend stocks you can add to your TFSA in 2024 is Exchange Income (TSX: EIF). This Winnipeg-based diversified company primarily focuses on acquisitions in aviation and manufacturing segments. The aviation segment provides scheduled airline and charter services, as well as emergency medical services, to people across Canada. Manufacturing businesses under its umbrella focus on engineering and producing various products, including metal components and specialty equipment.
After sliding by 14.3% in 2023, EIF stock has risen nearly 2% in January so far to currently trade at $45.96 per share, taking its market cap to $2.2 billion. At this market price, it offers a decent 5.7% annualized dividend yield and distributes dividend payouts every month.
In the last 10 years, Exchange Income has increased its dividends by nearly 51% from $1.68 per share to $2.54 per share with the help of consistent strength in its top- and bottom-line growth. Even as macroeconomic challenges affected the manufacturing businesses globally last year, EIF’s revenue rose 21.5% YoY (year over year) to $1.8 billion. As its management remains focused on diversification and quality new acquisitions, Exchange Income’s long-term growth outlook looks bright.
Mullen Group stock
Another top monthly dividend stock that TFSA investors should consider in 2024 is Mullen Group (TSX: MTL). The company provides transportation and logistics services to various sectors in Canada and the United States, including oil and gas, agriculture, mining, and construction.
Mullen pays a monthly dividend of $0.06 per share, which represents a 4.7% annualized yield at its current price of $15.27. At this market price, the stock has a market cap of $1.3 billion.
In the first three quarters of 2023, the Canadian logistics company’s revenue growth remained flat, but its adjusted earnings rose 15.2% on a YoY basis to $1.14 per share. Several factors led to this increase, including significant foreign exchange tailwinds, lower income tax, and reduced amortization of intangible assets.
As interest rates are expected to trend lower in the coming years, the demand for logistics services is likely to improve, which should have a positive impact on Mullen’s financial growth.
